Fayaz Ahmad Khan, Vice President of Byco Petroleum Pakistan Limited’s Commercial Division, believes that the petroleum prices mechanism should be left to the market instead of the government deciding prices fortnightly. He told The Correspondent in a written interview that Inland Freight Equalization Margin (IFEM), which ensures the same prices across the country, should be abolished.

“It makes fuel more expensive for the end-user,” Fayaz Ahmad Khan said. He said the market should be allowed to decide the prices which will attract investment and innovation in the industry.

Byco believes in the deregulation of the price as the government has done in High Octane products in the past. “Let the market decide the prices,” Mr. Fayaz Ahmed said. “This is how it is done in much of the world such as the US, UK, even in Africa and Afghanistan.” He said consumers will get benefits while companies will have healthy competition. “Efficiently run companies will survive while those are not efficient will lose their place in the market.”

Fayaz Ahmed Khan had worked in the senior management of Shell and Total, bringing his 20 years of experience in the company. This has reflected in Byco’s growth in the last three years as retail outlets increased to 400 locations across Pakistan. Currently, two Byco’s two refineries have combined production capacity of 156,000 barrels per day.

Byco is now investing in fluidized Catalytic Cracking Unit (FCC) to convert excess furnace oil to profitable high-quality gasoline and diesel. Byco is investing in Diesel Hydro Desulphurizing Unit which will remove the Sulphur from diesel. After completing these projects, Byco will become Pakistan’s first refinery which producing Euro-5 and Euro-6 compliant products.

However, he believed that government should remember that Pakistani environmental conditions are different from Europe. Byco’s vice-president suggested that the government should consider Pakistan’s environmental conditions while deciding next upgrading of fuel standards.

Explaining Byco’s perception of the future of the petroleum industry in Pakistan he said Byco is “extremely bullish on the future.”

Referring to the Oil Companies Advisory Council (OCAC) report, Fayaz Ahmed said OCAC in 2018 had projected a 10 percent per annum rise in the demand for petroleum products for the entire decade. He said COVID-19 caused some decline in demand but that phase was temporary as refineries are now not able to meet the existing demand. This is a good scenario for new investment. For the medium to long term, he said diesel and petrol demand will keep rising in Pakistan.

The author is a senior business reporter with bylines in leading newspapers and magazines across Pakistan.

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